Eli Lilly (LLY) and Daiichi Sankyo (Tokyo: 4568) announced on Friday evening that the FDA had not completed its regulatory review for its blood thinner drug, which would go by the brand name of Effient (prasugrel). The FDA previously delayed its decision by three months earlier this summer, but in this case no new deadline was set by the agency. Shares of Eli Lilly slid by about 4% after hours on less than 100,000 shares traded, closing near its 52-week low at $45.01 per share on Friday evening. However, the current slide in shares of Eli Lilly could prove to be a good entry point assuming the issues surrounding the delay are minor or just caused by the FDA being understaffed.
Analysts are forecasting blockbuster sales for Effient, which could eventually reach $2 billion by some estimates; so approval for the drug is important to fuel the future growth of Eli Lilly in the face of looming generic competition for Zyprexa. Effient would represent new competition for the multi-billion dollar blood thinner Plavix, which is marketed by Bristol-Myers (BMY) and Sanofi-Aventis (SNY). Given the complexity of the regulatory filing for Effient and the previous three month delay; it appears the FDA probably just needs more time to review the application rather than something more ominous such as requiring additional clinical trials. Also, many companies have faced similar delays by the agency, such as Cardiome's (CRME) wait of over six months for an approvable ruling on Kynapid.
$20.55 (09/28/08)
